EURO Press Release – The G8 summit in Lough Erne (UK) on 17-18 June 2013: the European Union’s role and actions

The United Kingdom, who is holding this year’s annual G8 presidency, has set out three main topics for their G8 presidency: trade, taxation and transparency (“the three Ts”). The three Ts will feature high on the summit’s agenda together with discussions of the global economy and foreign and security policy.

The European Union is the world’s biggest trading partner, accounting for 17% of global imports and exports of goods and commercial services. Trade is a key engine to boost growth and jobs in the EU. Almost one quarter of EU growth comes from international trade, and about 30 million jobs in the EU, or more than 10 % of the total workforce, depend on sales to the rest of the world, an increase of almost 50 % since 1995. To foster trade, EU policy translates into following actions: negotiating bilateral and multilateral trade agreements, ensuring that the rules agreed are actually applied, and working closely with the WTO and other multilateral institutions. This allows tackling international trade and customs barriers, backed up where needed with EU legislation.

In the field of bilateral trade agreements, prominent examples are the Transatlantic Trade and Investment Partnership with the United States, on which negotiations will be launched shortly, the free trade agreement that the EU has started negotiating recently with Japan, and the EU-Canada trade negotiations are now in their final stretch. In total, the EU has 28 trade agreements already in place, has finished negotiations on 9 trade agreements that yet have to enter into force, has 11 trade negotiations actively under way and several more trade and development negotiations on-going (for a full list see MEMO/13/282). If the EU was to complete all its current free trade talks tomorrow, it would add 2.2% to the EU’s GDP or €275 billion. This is equivalent of adding a country as big as Austria or Denmark to the EU economy. In terms of employment, these agreements could generate 2.2 million new jobs or additional 1% of the EU total workforce.

Complementing its bilateral trade relations, the EU continues to move forward with the multilateral trade agenda. For example, it is fully engaged to conclude a WTO trade facilitation agreement, on which the deal should be closed at December’s WTO ministerial meeting in Bali. Also, the EU is making the case to further trade in Africa, for example by lowering trade costs, stimulating infrastructure financing and coordinating support better. The EU is the world’s largest provider of development assistance in support of increased international and regional trade (“Aid for Trade”), with around 32% of total Aid for Trade flows – reaching more than €10.7 billion in 2010.

Every year, around one trillion euros is lost to tax evasion and avoidance in the EU – the equivalent to the EU’s next seven years’ budget. The global losses are much higher. Tax fraud and tax evasion limit the capacity governments to raise money and implement their economic and social policies. Against the backdrop of developments like the so-called off-shore leaks and the need for consolidating public finances, a new political momentum towards greater tax fairness in Europe and globally is gaining ground. Concrete measures of legal, administrative and political nature are deployed to further step up the fight against tax evasion and tax avoidance. The EU is actively promoting and pioneering this agenda, at home, with neighbouring countries and with its global partners in the context of the G8, the G20 and the OECD. Just in May 2013, the European Council of Heads of State and Government marked important progress in this regard: it confirmed that all Member States are committed to adopt the EU savings directive by the end of 2013. After years of stand-still, this would establish the automatic exchange of information as the common standard in the EU. It also will help to promote the automatic exchange of information further internationally in the context of the OECD. The EU, also in May, has agreed the mandates to negotiate agreements on automatic information exchange with its neighbouring countries, including Switzerland (see press release 9487/13). On 12 June 2013, the European Commission proposed the widest possible scope for the automatic exchange of information between EU tax administrations (see IP/13/530 and MEMO/13/533). This proposal paves the way for the EU to have the most comprehensive system of automatic information exchange in the world. The European Council in May also called on the Council to adopt measures to counter VAT fraud by end of June. The measures include the Quick Reaction Mechanism, which will enable rapid intervention by Member States in cases of sudden and massive fraud, and the Reverse Charge Mechanism, which specifically targets carrousel fraud. The European Commission’s Action Plan to fight tax fraud and tax evasion, presented in December 2012 complements this toolbox including action on tax havens and on aggressive tax planning.

International groups of companies use and abuse opportunities to shift taxable profits to low tax countries or tax havens. As a result some big multinationals pay extremely little corporate income tax in Member States, as illustrated by several recent high profile cases. The EU is fully supportive and contributes to the global efforts in the OECD, G20 and G8 to limit base erosion and profit shifting (BEPS), including through the Commission’s December 2012 Action Plan to strengthen the fight against tax fraud and evasion and its Recommendations on good tax governance and aggressive tax planning.

The EU very recently (see MEMO/13/546) updated its transparency and accounting directives on 12 June (see MEMO/13/546), which is a huge step in the global fight against corruption and for more transparency in extractive industries and forestry. This legislation, once fully in place in the Member States, will greatly benefit developing countries, providing them with instruments to reduce corruption and to boost revenues from the exploitation of minerals, fossil fuels or wood.

In the context of this G8 summit’s ‘Land Transparency initiative’ and within the framework of its development policy (the Agenda for Change), the EU has been supporting the implementation of the 2012 Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests through 40 projects and programmes on land issues. Alone for 2013 the EU made a further commitment of €31 million to implement the land governance guidelines in 10 more countries.

On Open government data, the EU is currently finalising the revision of the 2003 Public Sector Information Directive, which will open-up public sector data for re-use across Europe. Developers, programmers, businesses and citizens will be able to get and re-use public sector data at zero or very low cost in most cases. They will also have access to more exciting and inspirational content, for example including materials in national museums, libraries and archives. For the Commission, opening up public data means opening up business opportunities, creating jobs and building communities. (see Vice-President Kroes’ statement: IP/13/316)

Shortly before the G8 summit in Lough Erne will also be the occasion for the EU to announce specific partnerships with African countries to promote transparency.

4) OTHER ISSUES

Other issues likely to top the agenda of the G8 leaders are the discussion of the global economy and how to boost jobs and growth as well as international and security issues. The crisis in Syria will figure particularly high on the agenda. The EU is appalled by the escalating violence and the continued violations of human rights. The EU has also reiterated its support for the American-Russian initiative for an international peace conference on Syria and has announced its willingness to support preparatory efforts. The solution to the conflict lies in facilitating a Syrian-led political process. The EU is also with more than 840 million euros already the largest humanitarian donor for the crisis and will mobilize an additional 400 million euros for Syria and neighbouring countries – in particular Lebanon and Jordan, including the host communities there, which are most severely affected (read President Barroso’s statement of 6 June on the crisis in Syria: MEMO/13/515 or watch the video of the statement). The situation in Iran, the Middle East Peace Process, Mali, the tensions on the Korean Peninsula or the transition process in the Southern Mediterranean through the G8 Deauville partnership are also likely to be touched upon.

The EU is the biggest donor in the world – more than half of global development aid is provided by Europeans. Aid constitutes about 9% of the EU budget (this includes the European Development fund, which is not part of the EU budget).

Since 2004, thanks to the EU support, more than 9 million pupils have been enrolled in primary education, and more than 720,000 primary school teachers have been trained; 5 million children received immunisation against measles; 750,000 persons received antiretroviral combination therapy; 32 million households have been connected to drinking water and 9 million to sanitation facilities; More than 600,000 families were provided access to electricity; The Commission has helped to protect 1.5 million km² of forests and to conserve and 1.1 million km² of protected areas; the EU as a whole helped build and rehabilitate around 36 000 km of roads. (for more info, see http://ec.europa.eu/europeaid/what/index_en.htm)

Boosting agriculture and food security is a top priority of the EU’s development policy: every year around €1 billion is invested to that end. In 2010-2011 alone, the Commission allocated nearly €5 billion to improve food security. A recent report on the EU’s Food Facility – the €1 billion facility set up in 2008 on initiative of President Barroso to counter the negative effects of the food crisis – shows that in three years, the EU food facility has improved the lives of over 59 million people in 49 countries, and provided indirect support for another 93 million others, particularly farmers. On Saturday 15 June the European Commission will be awarded the Food and Agriculture Organisation’s Jacques Diouf prize for its contribution towards to the improvement of global food security. (see http://ec.europa.eu/europeaid/what/food-security/index_en.htm)

Today, 870 million people are still going hungry and malnutrition is responsible for over 3 million child deaths annually. Only a few days ago, at the Nutrition for Growth event of the UK G8 Presidency, the EU announced that it will spend an unprecedented €3.5 billion between 2014 and 2020 on improving nutrition in some of the world’s poorest countries. The policy framework will seek a stronger mobilisation and political commitment for nutrition at country and international level, will scale up nutrition interventions, and will allow the EU to invest in applied research and support information systems. (more info: see IP/13/516)

At this summit, also the fight against climate change is expected to be on the agenda and provide the global negotiations towards an agreement in 2015 additional momentum.

5) THE EU AS G8 MEMBER

Who represents the European Union at the G8 summit?

The European Union is a full member in the annual G8 Summits and is represented by the President of the European Commission and the President of the European Council. Commission President Barroso, who attended the G8 for the first time in Gleneagles in 2005, is participating for the 9th time, while Council President Van Rompuy has been attending the G8 since the entry into force of the Lisbon Treaty.

Since when does the EU participate in the G8 summits?

In 1977, representatives of the then European Community began participating in the London Summit. The first G8 summit was held two years earlier, in 1975 in Rambouillet (France). Originally, the EU had a limited role to those areas in which it had exclusive competences, but the EU’s role has grown with time. The European Commission was gradually included in all political discussions on the summit agenda and took part in all summit working sessions, as of the Ottawa Summit (1981).

Because the European Union is a unique supranational organisation – not a sovereign Member State – the name G8, ‘Group of Eight Nations’, still stands. For the same reason, the EU does not assume the rotating G8 presidency. The European Union has all the privileges and obligations of membership except the right to host and chair a Summit. The Commission and the Council have all the responsibilities of membership, and what the Presidents of the Commission and the Council endorse at the Summit is politically binding.

Which countries will hold the G8 presidency next?

The UK will hand over the Presidency to Russia for 2014. The Presidency will continue in its rotation to Germany in 2015, Japan in 2016, Italy in 2017, Canada in 2018, France in 2019, and the USA in 2020.